Exhibit 99.1

Crescent Financial Corporation Announces 46% Increase in December 31, 2005

Quarterly Earnings and 35% Increase in 2005 Annual Earnings

CARY, N.C., Jan. 19 /PRNewswire-FirstCall/ — Crescent Financial Corporation (Nasdaq: CRFN), parent company of Crescent State Bank today announced unaudited net income for the year ended December 31, 2005 of $3,144,000 reflecting a 35% increase over net income of $2,333,000 for the year ended December 31, 2004. Diluted earnings per share for the current twelve-month period were $.70 compared to split-adjusted diluted earnings per share of $.54 for the prior year period reflecting a 30% increase. The increase in earnings for 2005 was primarily the result of strong earning asset growth and an improved net interest margin due to rising interest rates. Net interest income, the difference between interest income on earning assets and interest expense on interest-bearing liabilities, increased by 34% from $10.4 million in 2004 to $14.0 million in 2005. Non-interest income increased by 3% from $2.3 million to $2.4 million. Non-interest income in 2004 included a non-recurring gain of $118,000 on the sale of a membership interest in a mortgage company. Excluding the non-recurring item, non-interest income increased by 9%. Non-interest expenses increased by 26% from $8.5 million to $10.8 million primarily in the areas of personnel, occupancy and data processing expenses as the Company continued to execute its growth and expansion plan. The Company opened two new full-service branch offices and a loan production office during the year. Additionally, a new Operations facility was opened in April 2005 and banking support personnel have been hired throughout the year to help manage the $80 million in new asset growth in 2005.

Unaudited net income for the three-month period ended December 31, 2005 was $1,005,000 or $.20 per diluted share compared to $689,000 or $.16 per share for the three-month period ended December 31, 2004. In comparing results for the two quarterly periods, net income increased by 46%, net interest income increased by 35%, non-interest income increased by 22% and non-interest expenses increased by 32%. Due to anticipated loan pay-downs received during the fourth quarter, coupled with new loan fundings at a slightly lower level than experienced through the first nine months of the year, the provision for loan losses was approximately $190,000 less than the average provision over the previous three quarters of 2005.

Crescent Financial Corporation reported total assets on December 31, 2005 of $411 million reflecting a 24% increase over total assets of $331 million on December 31, 2004. Total net loans increased by 28% from $254 million at December 31, 2004 to $324 million at December 31, 2005. Total deposits increased 18% from $274 million at December 31, 2004 to $322 million at December 31, 2005. Total stockholders’ equity grew by 55% from $27 million at December 31, 2004 to $41 million at December 31, 2005.

Mike Carlton, President and CEO stated, “We are pleased to be able to report to our shareholders the significant increase in net income over the past twelve months. Our focus has been to balance consistent asset growth and branch expansion with a continued increase in earnings. This past year reflects the results of our plan and the continued commitment to build a top-performing financial institution. We are extremely proud of our employees’ accomplishments in 2005 and believe that we are well positioned for the upcoming year.”

Crescent State Bank is a state chartered bank operating nine banking offices in Cary (2), Apex, Clayton and Holly Springs, Southern Pines, Pinehurst, Sanford and Garner, North Carolina and one loan production office in Raleigh, North Carolina. Crescent Financial Corporation stock can be found

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on the NASDAQ National Market trading under the symbol CRFN. Investors can access additional corporate information, product descriptions and online services through the Bank’s website at www.crescentstatebank.com.

Information in this press release contains “forward-looking statements.” These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Crescent Financial Corporation’s recent filings with the Securities Exchange Commission, including but not limited to its Annual Report on Form 10-KSB and its other periodic reports.

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Crescent Financial Corporation

Consolidated Balance Sheet

(Amounts in thousands except share and per share data)

(Unaudited)

	December 31, 2005			September 30, 2005			June 30, 2005
ASSETS
Cash and due from banks	$	9,403		$	12,176		$	8,652
Interest earning deposits with banks		69			593			616
Federal funds sold		—			—			14,753
Investment securities available for sale at fair value		55,550			53,155			52,251
Loans		328,322			322,192			301,111
Allowance for loan losses		(4,351	)		(4,293	)		(4,066	)
Net Loans		323,971			317,899			297,045
Accrued interest receivable		1,768			1,561			1,403
Federal Home Loan Bank stock		2,133			2,957			2,102
Bank premises and equipment		4,844			3,936			3,622
Investment in life insurance		5,483			5,434			5,384
Goodwill		3,600			3,600			3,600
Other assets		3,967			3,715			3,426
Total Assets	$	410,788		$	405,026		$	392,854
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits
Demand	$	46,830		$	52,921		$	50,322
Savings		9,365			7,072			3,673
Money market and NOW		87,695			82,636			94,930
Time		178,191			170,120			173,945
Total Deposits		322,081			312,749			322,870
Short-term borrowings		14,964			31,314			2,213
Long-term debt		30,248			30,248			38,248
Accrued expenses and other liabilities		2,038			1,537			1,381
Total Liabilities		369,331			375,848			364,712
STOCKHOLDERS’ EQUITY
Common stock		5,026			4,170			4,120
Additional paid-in capital		29,406			18,574			18,219
Retained earnings		7,707			6,702			5,857
Accumulated other comprehensive loss		(682	)		(268	)		(54	)
Total Stockholders’ Equity		41,457			29,178			28,142
Total Liabilities and Stockholders’ Equity	$	410,788		$	405,026		$	392,854
Ending shares outstanding ( b )		5,026,394			4,170,494			4,120,391
Book value per share	$	8.25		$	7.00		$	6.83

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Crescent Financial Corporation

Consolidated Balance Sheet

(Amounts in thousands except share and per share data)

(Unaudited)

	March 31, 2005			December 31, 2004 ( a )
ASSETS
Cash and due from banks	$	7,563		$	5,634
Interest earning deposits with banks		329			43
Federal funds sold		482			—
Investment securities available for sale at fair value		51,711			53,444
Loans		278,279			257,461
Allowance for loan losses		(3,876	)		(3,668	)
Net Loans		274,403			253,793
Accrued interest receivable		1,358			1,219
Federal Home Loan Bank stock		2,102			1,447
Bank premises and equipment		3,249			3,030
Investment in life insurance		5,333			5,284
Goodwill		3,600			3,600
Other assets		3,784			3,733
Total Assets	$	353,914		$	331,227
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits
Demand	$	43,411		$	42,818
Savings		3,306			3,037
Money market and NOW		76,442			74,114
Time		161,964			153,680
Total Deposits		285,123			273,649
Short-term borrowings		221			1,307
Long-term debt		40,248			28,248
Accrued expenses and other liabilities		1,388			1,246
Total Liabilities		326,980			304,450
STOCKHOLDERS’ EQUITY
Common stock		3,573			3,567
Additional paid-in capital		18,708			18,654
Retained earnings		5,204			4,563
Accumulated other comprehensive loss		(551	)		(7	)
Total Stockholders’ Equity		26,934			26,777
Total Liabilities and Stockholders’ Equity	$	353,914		$	331,227
Ending shares outstanding ( b )		4,108,937			4,101,922
Book value per share		6.55		$	6.53

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Crescent Financial Corporation

Consolidated Income Statements

(Amounts in thousands except share and per share data)

(Unaudited)

	For the year ended
	December 31, 2005			December 31, 2004 (a)
INTEREST INCOME
Loans	$	20,456		$	14,024
Investment securities available for sale		2,324			1,824
Fed funds sold and other interest		47			48
Total Interest Income		22,827			15,896
INTEREST EXPENSE
Deposits		6,884			4,431
Short-term borrowings		475			417
Long-term debt		1,513			618
Total Interest Expense		8,872			5,466
Net Interest Income		13,955			10,430
Provision for loan losses		807			736
Net interest income after provision for loan losses		13,148			9,694
Non-interest income
Mortgage loan origination income		755			574
Service charges and fees on deposit accounts		1,045			876
Realized gain/loss on sale of securities		(16	)		—
Other ( c )		633			892
Total non-interest income		2,417			2,342
Non-interest expense
Salaries and employee benefits		5,905			4,421
Occupancy and equipment		1,728			1,516
Data processing		648			549
Other		2,481			2,045
Total non-interest expense		10,762			8,531
Income before income taxes		4,803			3,505
Income taxes		1,659			1,172
Net income	$	3,144		$	2,333
NET INCOME PER COMMON SHARE ( b )
Basic	$	0.74		$	0.57
Diluted	$	0.70		$	0.54
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ( b )
Basic		4,270,664			4,068,351
Diluted		4,492,053			4,282,838
Return on average assets		0.84	%		0.76	%
Return on average equity		10.34	%		9.14	%
Net interest margin		3.94	%		3.61	%
Allowance for loan losses to avg loans		1.33	%		1.42	%
Nonperforming loans to total loans		0.01	%		0.00	%
Nonperforming assets to total assets		0.01	%		0.09	%

( a )	Derived from audited consolidated financial statements.
( b )	Adjusted, where applicable, for the stock split effected as a 15% stock dividend paid on April 27, 2005 to stockholders of record on April 14, 2005.
( c )	During the fourth quarter of 2004, the Company sold a membership interest in a mortgage company and recognized a $118,000 gain. Distributions received throughout 2004 from the mortgage company amounted to an additional $287,000.

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Crescent Financial Corporation

Consolidated Income Statements

(Amounts in thousands except share and per share data)

(Unaudited)

	For the three-month period ended
	December 31, 2005			September 30, 2005			June 30, 2005
INTEREST INCOME
Loans	$	5,989		$	5,466		$	4,814
Investment securities available for sale		612			576			566
Fed funds sold and other interest		8			17			14
Total Interest Income		6,609			6,059			5,394
INTEREST EXPENSE
Deposits		2,077			1,841			1,619
Short-term borrowings		211			201			45
Long-term debt		383			369			405
Total Interest Expense		2,671			2,411			2,069
Net Interest Income		3,938			3,648			3,325
Provision for loan losses		60			240			303
Net interest income after provision for loan losses		3,878			3,408			3,022
Non-interest income
Mortgage loan origination income		186			237			159
Service charges and fees on deposit accounts		297			269			242
Realized gain/loss on sale of securities		—			(17	)		1
Other ( c )		192			125			181
Total non-interest income		675			614			583
Non-interest expense
Salaries and employee benefits		1,723			1,509			1,369
Occupancy and equipment		454			443			440
Data processing		170			162			162
Other		659			604			643
Total non-interest expense		3,006			2,718			2,614
Income before income taxes		1,547			1,304			991
Income taxes		542			459			338
Net income	$	1,005		$	845		$	653
NET INCOME PER COMMON SHARE ( b )
Basic	$	0.21		$	0.20		$	0.16
Diluted	$	0.20		$	0.19		$	0.15
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ( b )
Basic		4,714,557			4,142,454			4,115,021
Diluted		4,918,451			4,384,392			4,369,012
Return on average assets		0.98	%		0.86	%		0.72	%
Return on average equity		10.63	%		11.62	%		9.42	%
Net interest margin		4.09	%		3.93	%		3.89	%
Allowance for loan losses to avg loans		1.33	%		1.33	%		1.35	%
Nonperforming loans to total loans		0.01	%		0.07	%		0.07	%
Nonperforming assets to total assets		0.01	%		0.05	%		0.05	%

( a )	Derived from audited consolidated financial statements.
( b )	Adjusted, where applicable, for the stock split effected as a 15% stock dividend paid on April 27, 2005 to stockholders of record on April 14, 2005.
( c )	During the fourth quarter of 2004, the Company sold a membership interest in a mortgage company and recognized a $118,000 gain. Distributions received throughout 2004 from the mortgage company amounted to an additional $287,000.

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Crescent Financial Corporation

Consolidated Income Statements

(Amounts in thousands except share and per share data)

(Unaudited)

	March 31, 2005			December 31, 2004
INTEREST INCOME
Loans	$	4,186		$	3,927
Investment securities available for sale		569			533
Fed funds sold and other interest		9			19
Total Interest Income		4,764			4,479
INTEREST EXPENSE
Deposits		1,347			1,252
Short-term borrowings		356			125
Long-term debt		17			179
Total Interest Expense		1,720			1,556
Net Interest Income		3,044			2,923
Provision for loan losses		204			154
Net interest income after provision for loan losses		2,840			2,769
Non-interest income
Mortgage loan origination income		172			122
Service charges and fees on deposit accounts		237			202
Realized gain/loss on sale of securities		—			—
Other ( c )		135			228
Total non-interest income		544			552
Non-interest expense
Salaries and employee benefits		1,302			1,188
Occupancy and equipment		392			392
Data processing		154			148
Other		575			549
Total non-interest expense		2,423			2,277
Income before income taxes		961			1,044
Income taxes		320			355
Net income	$	641		$	689
NET INCOME PER COMMON SHARE ( b )
Basic	$	0.16		$	0.17
Diluted	$	0.15		$	0.16
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ( b )
Basic		4,105,337			4,101,922
Diluted		4,339,019			4,311,156
Return on average assets		0.76	%		0.83	%
Return on average equity		9.50	%		10.21	%
Net interest margin		3.84	%		3.75	%
Allowance for loan losses to avg loans		1.39	%		1.42	%
Nonperforming loans to total loans		0.03	%		0.00	%
Nonperforming assets to total assets		0.02	%		0.09	%

( a )	Derived from audited consolidated financial statements.
( b )	Adjusted, where applicable, for the stock split effected as a 15% stock dividend paid on April 27, 2005 to stockholders of record on April 14, 2005.
( c )	During the fourth quarter of 2004, the Company sold a membership interest in a mortgage company and recognized a $118,000 gain. Distributions received throughout 2004 from the mortgage company amounted to an additional $287,000.

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